Key Highlights

  • Sales rose 11% to USD 2,043 million, led by Polaris Powersports sales up 18% and Marine sales up 29%.
  • Adjusted diluted EPS was USD 1.08, versus a prior-year loss, including USD 0.13 from tariff refunds.
  • Adjusted EBITDA margin expanded 118 basis points to 8.8%, and gross profit margin rose 52 basis points to 21.2%.
  • Full-year adjusted EPS guidance rose to USD 3.50 to USD 3.60 from USD 3.00 to USD 3.10.

Volume and Price Lift Sales

Polaris (NYSE:PII) reported third quarter 2026 results on Tuesday. Sales were USD 2,043 million, up 11%, driven by higher shipment volumes and positive net price, partly offset by the divestiture of Indian Motorcycle. North America sales rose 14% to USD 1,815 million, while international sales fell 11% to USD 228 million.

Reported diluted EPS was USD 0.66, compared with a loss of USD 0.28 a year earlier, and adjusted diluted EPS was USD 1.08. Reported net income attributable to Polaris was USD 38.4 million; adjusted net income was USD 63.1 million. Tariff refunds of USD 10 million benefited adjusted EPS by USD 0.13. On the call, management cited operational adjusted EPS of USD 0.95, up from USD 0.41 a year earlier.

Chief Executive Mike Speetzen credited disciplined dealer inventory management, operational excellence and the pace of innovation for continued share gains. The company reported its sixth straight quarter of off-road vehicle share gains, plus share gains in Marine.

Margins and Segments

Gross profit margin rose 52 basis points to 21.2%, helped by positive net price and operational efficiencies and partly offset by higher commodity costs. Operating expenses were USD 376 million, compared with USD 380 million, or 18.4% of sales, down 223 basis points. Adjusted EBITDA margin was 8.8%.

Polaris Powersports sales rose 18% to USD 1.82 billion with a 22.3% gross margin, on higher off-road, commercial and snowmobile shipments. Parts, garments and accessories sales rose 19%. The segment margin included a tariff refund of about USD 6 million. North America off-road retail sales rose low single digits, against a flat industry. Marine sales rose 29% to USD 133.4 million with an 11.9% margin, on mix and pontoon shipments. Aixam and Goupil sales fell 12% to USD 68.0 million on lower Aixam shipments.

Cash, Leverage and Supply Chain

Net cash from operating activities for the nine months was USD 291.8 million, compared with USD 562.3 million, and adjusted free cash flow was USD 219.3 million versus USD 485.5 million. Cash was USD 301.7 million. Management put net leverage at 2.0 times, down from 3.4 times at the start of the year. Dealer inventory was 3% higher than a year earlier but remained well below historical benchmarks, and material cost of goods sold originating from China was 9%, down from 14%.

Guidance Raised

Management now guides to 2026 adjusted sales of USD 7.55 billion to USD 7.60 billion, up from USD 7.30 billion to USD 7.50 billion. Adjusted EPS guidance is USD 3.50 to USD 3.60, up from USD 3.00 to USD 3.10, of which about USD 1.09 reflects tariff refunds recorded in the second and third quarters. On the call, the operational adjusted EPS range was given as USD 2.40 to USD 2.50, up from USD 2.05 to USD 2.15. The company did not provide reconciliations for guidance, citing items such as restructuring and integration costs that are hard to forecast.

Powersports Demand Markers to Follow

Tracking points include off-road retail growth relative to the industry, dealer inventory against the 3% increase, and the operational adjusted EPS range excluding tariff refunds. Further items are net leverage against 2.0 times, international sales after the 11% decline, and cash conversion after the seasonal working capital unwind.